Click on the image below to see its enlarged version.
January 12, 2010
Apple's App Store Economy
Applications downloaded on Apple's iPhone and iPod Touch generate $550MM per month in total revenue, which is shared 70/30 between application developers and Apple respectively.
Click on the image below to see its enlarged version.
Click on the image below to see its enlarged version.
January 1, 2010
November 23, 2009
Luncheon with the Prime Minister of India today
I am in Washington DC currently to be part of the state visit of the Prime Minister (PM) of India, Dr. Manmohan Singh. The stature of "state visits" is normally reserved for heads of states, which technically is not the case with the Prime Minister of India. That status constitutionally belongs to the President of India, which however is a nominated position and acts only as a nominal head of the country. The PM on the other hand is the elected leader of the party with majority in the Indian parliament, and is the political head of the country for all practical purposes. President Obama is therefore providing the stature of a full-fledged state visit to Dr. Manmohan Singh's visit, and he will have the honor to attend the first state dinner of Obama's Presidency tomorrow.Today I attended the luncheon with the Prime Minister Manmohan Singh. The luncheon, organized by the U.S. Chamber of Commerce in coordination with the U.S.-India Business Council, is the only agenda item in the PM's itinerary reserved for a dialogue with the business community of the two countries. Dr. Manmohan Singh, a noted economist and probably the most qualified PM ever in the Indian history, was the chief architect of India's economic reforms that started in 1991, and is credited with turning around the economic fortunes of the world's biggest democracy. India has now become one of the fastest growing major economies in the world. He shared his vision of the U.S.-India business partnership and gave a clear signal that India Inc. is open for business and encouraged foreign investment in almost all major sectors of the country's economy.
The PM and his Congress party gained a comfortable majority during the national election in India this summer, and has therefore received the necessary public mandate to continue economic liberalization without relying on any external political partners, which frustratingly had been the case earlier during his previous term.
It was an honor to be part of the select group of business professionals who were invited to represent the interest of the business community of both the countries at the famous International Hall of Flags in the U.S. Chamber of Commerce building in Washington DC. Our group included U.S. government officials, senior business executives and CEOs of prominent firms from both the countries including Indra Nooyi (PepsiCo), Dave Cote (Honeywell), Paul Jacobs (Qualcomm), Ellen Kullman (DuPont), Terry McGraw (McGraw-Hill Companies), Rata Tata (Tata Group), Mukesh Ambani (Reliance Industries), Sunil Bharti Mittal (Bharti Group, the largest mobile carrier in India), Chanda Kochar (ICICI bank, the largest private sector bank in India), O.P. Bhatt (State Bank of India), etc.
November 9, 2009
Two speaking engagements in Europe - Monaco Media Forum & TiE UK
I just landed in London on couple of speaking engagements in Europe. The main event is the Monaco Media Forum (MMF) in Monte Carlo later this week. I'm speaking on a panel discussing "The Living Room War: Redefining Television." It should be an interesting conversation, and I'll write about it after the conference.
Here is a blurb on the conference from its site:
Here is a blurb on the conference from its site:
"Now in its fourth year, MMF brings together leaders of new and old media
for two and a half days of high-level discussions about the future of online,
broadcast and print communications. Hosted by HSH Prince Albert II, the
invitation-only event focuses on emerging opportunities in technology,
distribution and content, along with related developments in marketing and
finance."
This is my first time at MMF, so I'm looking forward to it. From what I've been told from previous attendees, unlike many open conferences where you may have a few thousand attendees, making the conference unwieldy and difficult for attendees to have a close one-on-one interaction, the invitation-only MMF provides close interaction between the few hundred invited folks.
Since I was on my way to Monaco along with a few other MMF attendees from the U.S., the U.K. chapter of The Indus Entrepreneurs (TiE) requested us to speak to their members and have hosted an event today evening at the CASS Business School in London. The topic is "Bridging the Pond – A Roundtable Conversation Innovation and funding in Media and state of Advertising in US and UK." I've been involved with TiE for over ten years now, and am a Charter Member with their Silicon Valley chapter, so I felt obligated to accept their invitation. In addition, I thought it will be good to get a sense of the entrepreneurship scene in London.
And finally, I'm taking a few days off for personal time after the MMF. It has been quite busy few weeks after I announced that I'm leaving NBCU in early October. I'm doing a road trip along the French and Italian rivieras. This should be the most exciting part of my trip. I did not get a chance to do much research and properly plan the road trip, but with the help of suggestions from a few friends, I settled on driving around the Mediterranean coastline and checking out quaint small towns on both the rivieras. I'll spend more time on the Italian side than the French side.
I shall post pictures during my travel diary. Not sure how much Internet connection I will have in those small towns, but I'll definitely post pictures after the trip if I can't during it.
November 4, 2009
Speaking at the Columbia Business School today
I expected a more relaxed schedule after announcing my departure from NBC Universal few weeks back. Unfortunately it has not been so thus far. I spent the week of October 19 in California - spoke at the Digital Hollywood conference in LA early part of the week, and then spent a few days at the Web 2.0 in San Francisco on my way back to NYC.
I'm off to Europe on Sunday to speak at the Monaco Media Forum, but am planning to get some personal time during that trip (more on that later).
Today I'm a guest speaker for a 2nd year MBA class at the Columbia Business School. I always love a dialogue with students. America has arguably the best higher education infrastructure in the world, including the best business schools. In fact, this has been one of the biggest competitive advantages of U.S., and will remain so at a time when questions are being raised on the country's continued dominance in the future as the #1 global economic superpower amidst much faster growing emerging economies like China, India, etc.
When it comes to business education, I believe that MBA programs need to be more steeped in real business environment than they have been in the past. There has to be a tighter cooperation/engagement between daily classroom training and actual real-world situations. In fact, there are some who argue that MBA education, as it stands today, is a total waste of time. Students graduate with theoretical frameworks and un-realistic expectations which fail miserably in the real world.
One of the hottest topics of today, after a handful of unfettered, greed-driven American financial institutions almost single handedly brought down the global economy, is whether capitalism is the best economic framework to run a country. I'm still a strong believer in capitalism, having grown up in India's government-controlled market system and seen its serious limitations (before India liberalized its economy in 1991 and invited foreign investment). However, ethics is a core component of capitalism. The U.S. economic debacle was a failure to observe rules of ethics, not the failure of capitalism itself. This requires managers to maximize value to "stakeholders" not just "shareholders." Stakeholders include shareholders plus customers & society, without which no business enterprise can make money in a sustainable manner over the long run.
The format of business case studies, which simulate real-world situations, was deployed in business schools as a step to expose business students to real world situations. However, it is very easy to discuss, say, a case on business ethics in a classroom and decide what is right and wrong in a vacuum when participants are not personally involved in that situation in an actual work setting. It is far more difficult to do that in a real-life situation, say, at your job, because the right answer usually has shades of grey, instead of black or white, and decision makers have personal stakes/interests involved.
Unlike science, where we have empirically proven laws which always stay the same, the practice of running a company and generating returns for shareholders is an art. It evolves constantly. There are several external influencing factors including market environment, regulatory laws, political and social changes, trade, technology, etc, which are constantly changing, thus requiring real-time adjustments to business practices. Real-life experience dealing with such fluidity therefore becomes a more critical determinant of success in business than a classroom training.
For someone who finished his MBA back in 1997, an interaction with current MBA students is therefore always fun. Looking forward to it.
I'm off to Europe on Sunday to speak at the Monaco Media Forum, but am planning to get some personal time during that trip (more on that later).
Today I'm a guest speaker for a 2nd year MBA class at the Columbia Business School. I always love a dialogue with students. America has arguably the best higher education infrastructure in the world, including the best business schools. In fact, this has been one of the biggest competitive advantages of U.S., and will remain so at a time when questions are being raised on the country's continued dominance in the future as the #1 global economic superpower amidst much faster growing emerging economies like China, India, etc.
When it comes to business education, I believe that MBA programs need to be more steeped in real business environment than they have been in the past. There has to be a tighter cooperation/engagement between daily classroom training and actual real-world situations. In fact, there are some who argue that MBA education, as it stands today, is a total waste of time. Students graduate with theoretical frameworks and un-realistic expectations which fail miserably in the real world.
One of the hottest topics of today, after a handful of unfettered, greed-driven American financial institutions almost single handedly brought down the global economy, is whether capitalism is the best economic framework to run a country. I'm still a strong believer in capitalism, having grown up in India's government-controlled market system and seen its serious limitations (before India liberalized its economy in 1991 and invited foreign investment). However, ethics is a core component of capitalism. The U.S. economic debacle was a failure to observe rules of ethics, not the failure of capitalism itself. This requires managers to maximize value to "stakeholders" not just "shareholders." Stakeholders include shareholders plus customers & society, without which no business enterprise can make money in a sustainable manner over the long run.
The format of business case studies, which simulate real-world situations, was deployed in business schools as a step to expose business students to real world situations. However, it is very easy to discuss, say, a case on business ethics in a classroom and decide what is right and wrong in a vacuum when participants are not personally involved in that situation in an actual work setting. It is far more difficult to do that in a real-life situation, say, at your job, because the right answer usually has shades of grey, instead of black or white, and decision makers have personal stakes/interests involved.
Unlike science, where we have empirically proven laws which always stay the same, the practice of running a company and generating returns for shareholders is an art. It evolves constantly. There are several external influencing factors including market environment, regulatory laws, political and social changes, trade, technology, etc, which are constantly changing, thus requiring real-time adjustments to business practices. Real-life experience dealing with such fluidity therefore becomes a more critical determinant of success in business than a classroom training.
For someone who finished his MBA back in 1997, an interaction with current MBA students is therefore always fun. Looking forward to it.
October 6, 2009
Moving on...
After spending three enriching years with NBC Universal, I've decided to move on to pursue other opportunities externally.
It has been an amazing ride. I was brought in by the NBCU management in Aug 06 to "instill digital DNA into this traditional media firm that was looking to transform itself in the digital world." Yes, those were the exact words during my interview. Looking back, I'd say that we did move the needle in the digital direction over the past three years.
I'd admit, the ride was not always a smooth one, and I did have my share of challenges working within a big media firm and introducing change. Change is hard, especially when the future is uncertain, and you're constantly countering the fear that the new direction may cannibalize existing, more profitable, though shrinking revenue streams & business models.
But then these are turbulent times for the media industry as digital re-defines almost all existing norms, and users change their behaviors in probably the most dramatic fashion ever. I feel the bumps provided invaluable learning experiences for me and everyone involved at NBCU.
Ref: my next role, I've been exploring several options but have not yet made a decision. It'd be an entrepreneurial opportunity in all likelihood. I'll be taking some time off to travel and speak at a few conferences (Digital Hollywood and Monaco Media Forum).
That brings me to another, more exciting announcement on personal front. We're expecting our first child. We've been married for nine years, and decided to finally take the plunge.
So, exciting times for me on both personal and professional front!
Stay tuned.
It has been an amazing ride. I was brought in by the NBCU management in Aug 06 to "instill digital DNA into this traditional media firm that was looking to transform itself in the digital world." Yes, those were the exact words during my interview. Looking back, I'd say that we did move the needle in the digital direction over the past three years.
I'd admit, the ride was not always a smooth one, and I did have my share of challenges working within a big media firm and introducing change. Change is hard, especially when the future is uncertain, and you're constantly countering the fear that the new direction may cannibalize existing, more profitable, though shrinking revenue streams & business models.
But then these are turbulent times for the media industry as digital re-defines almost all existing norms, and users change their behaviors in probably the most dramatic fashion ever. I feel the bumps provided invaluable learning experiences for me and everyone involved at NBCU.
Ref: my next role, I've been exploring several options but have not yet made a decision. It'd be an entrepreneurial opportunity in all likelihood. I'll be taking some time off to travel and speak at a few conferences (Digital Hollywood and Monaco Media Forum).
That brings me to another, more exciting announcement on personal front. We're expecting our first child. We've been married for nine years, and decided to finally take the plunge.
So, exciting times for me on both personal and professional front!
Stay tuned.
October 1, 2009
Mobile: Carriers cash-in on explosive data growth; advertising & commerce revenue lag promised growth
For the quarter ending June 30, 2009, wireless data ($3.4Bn) contributed over a quarter of the total wireless revenue ($13.2Bn) for AT&T, the 2nd largest mobile carrier in the U.S. As discussed before, data revenue will be the key growth driver for mobile carriers not just in the U.S. but worldwide, as voice service increasingly gets commoditized in favor of other value-added services offered by carriers.
Continued popularity of iPhone, which has been habituating users to use their mobile phones for Internet usage, and huge growth of Internet/data friendly smartphones will further increase the share of data revenue for carriers.
While mobile data usage and the number of users going online on their cellphones continue to increase as projected, these are early days for anyone other than carriers to profit from this trend. As the eMarketer chart shows, in 2009 there will be over 70M U.S. mobile Internet users. Despite a large user base, mobile advertising and commerce revenue has not really kept pace with their earlier lofty projections.
eMarketer projects 2009 U.S. mobile advertising revenue to be $416M, much smaller than ~$24B online advertising revenue forecasted for this year. The promise of reaching very targeted audience, down to an individual cell phone user level, and "killer" location-based services/targeting that users will pay for remains un-fulfilled.
More than 2Bn iPhone applications have been downloaded, mostly free, but majority of them don't have any advertising integration (except house ads) - another example that monetization thus far severely lags usage on the mobile platform.
Nobody is denying the long-term potential of the mobile medium - given its ubiquity, reach advantage (over 4Bn mobile subs globally vs ~1Bn PCs sold), proximity to its user, and targeting ability - but it's going to take much longer than previously expected for this industry to mature. Non-standard nature of devices, user interfaces, operating systems, and metrics are signs of an industry that is still in its infancy. Privacy issues and feared regulations also require attention, and warrants proper education for regulators and users, as well as permission-based implementations of mobile experiences by advertisers and service providers.
I believe major Internet players with existing services that can be easily ported to mobile, and those with deep pockets and staying power to heavily invest in mobile for the long-term, would have significant advantage in garner a big share of the mobile value ecosystem (apart from carriers). Companies like Google, Yahoo!, Apple can build beach-heads and gain users' mind share during the current adoption phase. These firms already have the brand recognition and loyalty to engender trust amongst users - assets which can be leveraged to generate lucrative margins when the industry matures and monetization ultimately kicks in.
Continued popularity of iPhone, which has been habituating users to use their mobile phones for Internet usage, and huge growth of Internet/data friendly smartphones will further increase the share of data revenue for carriers.
While mobile data usage and the number of users going online on their cellphones continue to increase as projected, these are early days for anyone other than carriers to profit from this trend. As the eMarketer chart shows, in 2009 there will be over 70M U.S. mobile Internet users. Despite a large user base, mobile advertising and commerce revenue has not really kept pace with their earlier lofty projections.eMarketer projects 2009 U.S. mobile advertising revenue to be $416M, much smaller than ~$24B online advertising revenue forecasted for this year. The promise of reaching very targeted audience, down to an individual cell phone user level, and "killer" location-based services/targeting that users will pay for remains un-fulfilled.
More than 2Bn iPhone applications have been downloaded, mostly free, but majority of them don't have any advertising integration (except house ads) - another example that monetization thus far severely lags usage on the mobile platform.Nobody is denying the long-term potential of the mobile medium - given its ubiquity, reach advantage (over 4Bn mobile subs globally vs ~1Bn PCs sold), proximity to its user, and targeting ability - but it's going to take much longer than previously expected for this industry to mature. Non-standard nature of devices, user interfaces, operating systems, and metrics are signs of an industry that is still in its infancy. Privacy issues and feared regulations also require attention, and warrants proper education for regulators and users, as well as permission-based implementations of mobile experiences by advertisers and service providers.
I believe major Internet players with existing services that can be easily ported to mobile, and those with deep pockets and staying power to heavily invest in mobile for the long-term, would have significant advantage in garner a big share of the mobile value ecosystem (apart from carriers). Companies like Google, Yahoo!, Apple can build beach-heads and gain users' mind share during the current adoption phase. These firms already have the brand recognition and loyalty to engender trust amongst users - assets which can be leveraged to generate lucrative margins when the industry matures and monetization ultimately kicks in.
September 25, 2009
September 14, 2009
September 7, 2009
US Open tennis: Djokovic vs Stepanek, 4th round
Djokovic leading 6-1, 4-2
------------------------
Sab Kanaujia
NBC Universal, New York
Sent from my BlackBerry Wireless Handheld.
September 2, 2009
Our launch today
Today we launched tensports.com, the first, premiere, free, sports video portal in the Indian sub-continent. It's a strategic partnership between NBC Universal and Ten Sports, one of the most watched sports channels in the region.The portal will stream live cricket matches, and also offer hundreds of hours of Ten Sports cricket video archive, all for free. More sports will follow. The press release is here.
I'll like to sincerely thank everyone involved over the past two months to make this launch possible in such a short-period of time, working across several different time zones. It's been a great team effort between Ten Sports (Dubai), NDTV (Delhi), Vdopia (California & India) and NBCU (NYC & Bangalore).
As a die-hard cricket fan, I couldn't have asked for a better summer project. Now I need a vacation!
August 22, 2009
Got lucky in thunderstorm
Avoided a tree falling on my car by seconds - this fell on the road right in front of us just now.
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Sent from my iPhone.
August 9, 2009
Why America fights wars
Today I watched Eugene Jarecki's insightful movie, Why we fight. It explores the reasons why U.S. invaded Iraq after 9/11, and links those reasons to the power of the American military-industrial complex, a phrase coined by Dwight Eisenhower in his exit speech as the U.S. President in 1961.
Eisenhower, a celebrated five-star U.S. military general himself, served two terms as the U.S. President at a time when the Cold War was taking shape post World War II, and was the first to warn us of the threat to democracy as capitalism took control of the U.S. military. U.S. spends three-fourth of a trillion dollars on its military every year - more than the combined military budget of all other nations on the planet. Wars drive huge amounts of profits for the handful of major U.S. corporations (Boeing, Northrup Grumman, etc) which support majority of the country's military needs.
Why we fight is extremely thought-provoking. Strongly recommended.
Eisenhower is my new hero. Below is the video of his 1961 exit speech to the American people.
Eisenhower, a celebrated five-star U.S. military general himself, served two terms as the U.S. President at a time when the Cold War was taking shape post World War II, and was the first to warn us of the threat to democracy as capitalism took control of the U.S. military. U.S. spends three-fourth of a trillion dollars on its military every year - more than the combined military budget of all other nations on the planet. Wars drive huge amounts of profits for the handful of major U.S. corporations (Boeing, Northrup Grumman, etc) which support majority of the country's military needs.
Why we fight is extremely thought-provoking. Strongly recommended.
Eisenhower is my new hero. Below is the video of his 1961 exit speech to the American people.
July 21, 2009
Amazon's Orwellian moment exposes limitations of existing legal laws in today's digital age
Some owners of Kindle, Amazon's popular electronic book reader, found two books missing from their devices when they woke up Thursday morning. The missing titles were George Orwell's classics 1984 and Animal Farm, which users had bought from Amazon's online book store. The company used its wireless access to users' Kindles and remotely deleted the books overnight without their prior permission. In a public statement, Amazon explained that these books were originally made available on its book-store by a company that did not have rights to the titles, and the move was therefore aimed to protect copyrights of the legal rights owner. Amazon refunded affected readers the price they paid for the books.While Amazon's move seems logical, it was quite creepy for Kindle owners who did not realize that Amazon had such rights, authority and even the ability once they had purchased the books. Amazon's action exposed its unprecedented powers - the ability to delete any book a user buys from the world's largest book-store, whenever, and for whatever reason Amazon deems appropriate.
This is a huge challenge in a digital world where more and more content, whether books, videos, songs, newspapers, magazines, etc, will only exist in bits and bytes, tethered to big content aggregators like Amazon and Apple even after buyers' outright purchase. Aggregator's contracts provide them very broad rights. Buyers don't seem to "own" the digital content in true sense, as they're used to in the physical world, but rather "rent" it.
Interestingly, Amazon's license agreement for Kindle seems to provides users the right to keep a permanent copy of purchased material. Legal challenge to Amazon's deletions looks very likely.
Retailers in the physical world cannot force their way into buyers' homes and take back purchased material. Amazon did exactly that by deleting the purchased digital books. The Digital Rights Management (DRM) technology, used by sellers to protect un-authorized use of purchased content, also provides sellers digital strings always connected to that content via Internet.
This power can be very easily abused.
Governments, totalitarian regimes, courts, etc, can order total wipe-out of content they find objectionable for whatever reasons in this digital age - not just blocking future sales, but deleting every existing copy from central servers and every purchased digital copy from owners' connected devices. Such unprecedented control over content by a few for-profit companies can severely restrict free exchange of ideas - a core requirement in a free democratic society.
No company should have this capability.
While Amazon's deletion is not one of the extreme scenarios mentioned above, it provides a real life example, no matter how innocent, that exposes inadequacy of outdated current legal statutes for today's increasingly digital world. Legal reviews of Google's book deal with publishers is another similar example. I'm sure lawyers, civil libertarians and customer advocates will take a very close look at the Amazon incident.
In the interim, Kindle owners and its prospective buyers should apply pressure on Amazon to voluntarily change its policies and remove its technical ability that allows it to remotely delete purchased content without buyers' explicit prior permission.
July 20, 2009
Discount for victims of Bernie Madoff's ponzi shceme
Clothing store in Manhattan's West Village.
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Sent from my iPhone.
July 19, 2009
July 8, 2009
SURFACE: A film from underneath
SURFACE : A film from underneath from tu on Vimeo.
Synopsis:“What would the world be like from an underground perspective?”
SURFACE is an experimental film, exploring the emotional journey from an underground urban perspective. This 'urban symphony' transforms human actions and street objects into beats that harmoniously compose a grand audio and visual composition. The film emphasizes the ideas of ‘point of contact’, ‘human identity’ and notion of ‘live footprints’.
SURFACE is a part of UND-VIS, a thesis project for MFA Design and Technology, Parsons The New School for Design. UND-VIS : Under Vision Experiment; explores the new visual language of an unconventional perspective from below.
More info. + behind the scene : www.surfacefilm.com
July 2, 2009
June 16, 2009
Social recommendation reaching long-promised potential
Content on the Internet has been exploding exponentially. YouTube, the largest video site on the Internet, adds ten hours of new video every single minute. By some measure, 10M new pages are added on the World Wide Web every day. The world of blogs has also grown tremendously, with Technorati, the popular blog search engine, tracking over 120M blogs worldwide (excluding millions that are not tracked in China, country with the world's largest Internet population).
This makes discovery of new content a huge challenge for both users (how to discover) and publishers (how to get discovered). I'm going to focus only on the user challenge in this post.
As the content on the Internet continues to multiply dramatically, the ability for users to find the content that may exist out there, which they may like and therefore want to consume, poses one of the most significant problems on the Web. Search engines have become a popular tool for users to find what they're looking for, but Search requires users to express their intent first. Since you don't know what you don't know, discovery of new content that you are unaware of, but may like, necessitated the development of recommendation engines, which proactively suggest what content users may like without much, if any, explicit action on their part.
Recommendation engines broadly fall under three categories:
1) Editorial recommendation: This is the most basic form of recommendation method whereby the editor/publisher picks what to highlight on its site amongst all available content - e.g., "featured video of the day", "featured story of the week," etc. This is a one-size-fits-all approach, where the recommendation focuses on publisher's goals and/or the average consumption behavior/demand amongst all visitors to the site, and is not customized for each individual visitor.
2) Customized recommendation based on individual's behavior: This method involves analyzing each user's content consumption pattern and using technology to recommend similar content to that user. This is the most difficult approach technically. Complex algorithms are needed to 1) "read" and categorize the repository of all available content on one hand, 2) track, capture and analyze each user's consumption patterns, and then 3) match those patterns against the categorized repository to make recommendations which are uniquely customized for each user.
Examples of this approach include the Pandora Internet radio that provides customized radio channels to users based on the songs users initially select to hear. Pandora's Music Genome Project utilizes 400 different characteristics to classify all available songs into categories that are leveraged by Pandora to understand a user's music taste and recommend him/her relevant songs. Cinematch, Netflix's movie rental recommendation system, is another such example.
"Reading" the content repository and categorizing them, say, in logical genres, is the most difficult aspect of this approach. Getting the recommendation correct with a high level of accuracy on a consistent basis is extremely hard. Since the recommendation engine works in the background, employing complex algorithms and other behavioral science factors, users expect the "black box" to make correct recommendation every single time. Getting it 90% correct, though impressive, may still not win user's loyalty and trust. If I hate chick flicks, make one such movie recommendation to me, and that's the last time I'd trust the technology behind the recommendation engine.
Netflix, recognizing the complexity of this recommendation approach, has an on-going contest, launched in October 2006, that will award $1M to the person that can improve the accuracy of its already-impressive Cinematch movie recommendations by 10%.
This makes discovery of new content a huge challenge for both users (how to discover) and publishers (how to get discovered). I'm going to focus only on the user challenge in this post.
As the content on the Internet continues to multiply dramatically, the ability for users to find the content that may exist out there, which they may like and therefore want to consume, poses one of the most significant problems on the Web. Search engines have become a popular tool for users to find what they're looking for, but Search requires users to express their intent first. Since you don't know what you don't know, discovery of new content that you are unaware of, but may like, necessitated the development of recommendation engines, which proactively suggest what content users may like without much, if any, explicit action on their part.
Recommendation engines broadly fall under three categories:
1) Editorial recommendation: This is the most basic form of recommendation method whereby the editor/publisher picks what to highlight on its site amongst all available content - e.g., "featured video of the day", "featured story of the week," etc. This is a one-size-fits-all approach, where the recommendation focuses on publisher's goals and/or the average consumption behavior/demand amongst all visitors to the site, and is not customized for each individual visitor.
2) Customized recommendation based on individual's behavior: This method involves analyzing each user's content consumption pattern and using technology to recommend similar content to that user. This is the most difficult approach technically. Complex algorithms are needed to 1) "read" and categorize the repository of all available content on one hand, 2) track, capture and analyze each user's consumption patterns, and then 3) match those patterns against the categorized repository to make recommendations which are uniquely customized for each user.
Examples of this approach include the Pandora Internet radio that provides customized radio channels to users based on the songs users initially select to hear. Pandora's Music Genome Project utilizes 400 different characteristics to classify all available songs into categories that are leveraged by Pandora to understand a user's music taste and recommend him/her relevant songs. Cinematch, Netflix's movie rental recommendation system, is another such example.
"Reading" the content repository and categorizing them, say, in logical genres, is the most difficult aspect of this approach. Getting the recommendation correct with a high level of accuracy on a consistent basis is extremely hard. Since the recommendation engine works in the background, employing complex algorithms and other behavioral science factors, users expect the "black box" to make correct recommendation every single time. Getting it 90% correct, though impressive, may still not win user's loyalty and trust. If I hate chick flicks, make one such movie recommendation to me, and that's the last time I'd trust the technology behind the recommendation engine.
Netflix, recognizing the complexity of this recommendation approach, has an on-going contest, launched in October 2006, that will award $1M to the person that can improve the accuracy of its already-impressive Cinematch movie recommendations by 10%.
3) Social recommendation: This approach makes content recommendation to a user based on usage patterns of other users instead of his/her own consumption pattern. It's essentially a popularity contest, where popularity amongst a set of users is measured to make recommendations.
Social recommendation comes in two flavors. The set of users used to measure popularity can be either a limited set - user's friends (social graph), members belonging to a particular group or affiliation, etc - or the general set of all users consuming content on the site (e.g., most viewed, highest rated, etc).
Of the two, social recommendation based on preferences of my social graph - people I trust - holds the biggest promise amongst all approaches currently being utilized to make content recommendations. Reasons: 1) the approach requires rather simple technology, 2) users expectations are managed - not all recommendations need to be on the mark because everyone has friends whose tastes are different from their own - and 3) the approach simply works, because it follows a long and well established norm in the real world. By some measures, more than 30% of new content consumed by people is based on recommendation from someone they know and trust. Web 2.0 tools and changing user behavior where more and more people are sharing and contributing more and more stuff on the Internet is making social recommendation based on a user's social graph a mainstream reality.
The phenomenal growth of Twitter (32M users in May vs. 1.6M a year ago), and status update feature (copied from Twitter) used by Facebook's 200M+ users has immensely contributed in the social discovery of new content on the ever-growing World Wide Web. Given the relevancy due to the context provided by my social graph, I check out most of the links, photos, videos, and stories suggested to me on Facebook.
Publishers will very soon look at social recommendation engines as a major source of traffic to their sites, maybe more important than Web search engines, which on average contributes to as much as a third of all traffic to a publisher's site today. The impact on Google's business as a leading Web search engine remains to be seen. But users are not complaining. Why should they, if their trustworthy social graph is at work, 24/7/365, to open the doors to exciting, new content on the Web for them.
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